OTTUMWA — The proof is in the numbers.
Ottumwa residents have stayed in the city to do their business, and they're helping the community — and themselves — by doing so.
City finance director Kala Mulder unveiled the city's proposed fiscal year 2022 budget during Tuesday's city council meeting at City Hall. The budget will be balanced and is keyed by almost a 24-cent reduction in the property tax levy from last year to $22.22. It's the first decrease the city has seen since fiscal year 2016.
But increased revenues also make a difference. The revenue from the Local Option Sales Tax, which is gathered when citizens shop locally and a portion of which goes to road and street repair, is estimated to top $4 million, perhaps for the first time.
The other big revenue comes from the Road Use Tax, which is drawn from gas tax, motor vehicle registrations, vehicle title fees, etc. That revenue is expected to increase to almost $3.4 million, a place it hasn't been.
"When COVID-19 happened and projected the L.O.S.T. to be down 25-40%, and the Road Use Tax to be down 40-60%, we were worried about revenues," Mulder told the council. "But it is a testament to our local community and those around us that have been coming here instead of going to Iowa City or Des Moines to shop.
"That means the world to us to balance the budget this year," she said. "This is what local means. They may not know they're helping us, but it's important they do."
Other takeaways from the budget presentation:
• Property valuations have increased by more than $11 million over the last fiscal year, helping fuel the decrease in the rate. The valuation is also the largest increase since a $16 million recovery after valuations plummeted between 2018 and 2019.
• Residents can expect most of their property tax dollars to go toward public safety services, with 54% going police and fire.
• The city's hotel-motel tax revenue is down, with the pandemic partly to blame by causing cancellations of events for most of the last year. But that could be boosted when the Babe Ruth World Series comes to the city in August and is expected to bring $3 million to the economy, according to Greater Ottumwa Convention and Visitors Bureau estimates from when the tournament was held in 2016.
"That's why it's important to have the tournaments, weddings and conferences here," Mulder said.
• Another potential hurdle is the cost of health insurance and other benefits. Though the city saved on the Post-65 retiree insurance, costs for current employees continue to increase. The benefits levy represents 38% of the city's overall tax levy.
"It's our largest expense levy," Mulder said. "Initially, we received an increased rate of $860,000 for our health insurance, but we believe we can find some savings in the next couple weeks we can make decisions on."
• The city's general operating budget will feature a surplus for the second year in a row, albeit a small surplus. Revenues are expected to be a little more than $10,000 ahead of expenses.
"This was a trying year again," Councilman Marc Roe said. "This budget has been a testament to the work everyone has done. Because of proper bonding, we've been able to re-invest and buy new capital items that our community desperately needs.
"We've been hit with a lot of problems like COVID-19, stagnant tax valuations, and not that much business growth in Ottumwa," he said. "Yet we're still producing a budget that not only looks positive, but we're starting to see the tax rate go down."
Councilman Matt Dalbey concurred with Roe, crediting both Mulder and City Administrator Phil Rath for digging through the numbers to find positives.
"This is a breath of fresh air from what we've had before," Dalbey said. "Last year we had to make tough choices to get us in this position, but it's coming from good information we didn't have before. You given us solid, accurate information to make better decisions. It's coming together, and I'm excited for about the next five years, at least."
In other business:
• The council approved a request from the Greater Ottumwa Convention and Visitors Bureau for $25,000 that will go toward the Babe Ruth World Series. Executive director Andrew Wartenburg said that money would go toward marketing materials, souvenirs, sponsorships, etc.
• The council agreed to relax rental inspections for 90 days.